Episode 368: Jim Rowley & Andy Maack - Implementing Index Funds at Vanguard
Release Date: 07/31/2025
Episode 371: Banks Sell Products, Not Advice
The Rational Reminder Podcast
In this episode, Ben Felix and Cameron Passmore take a critical look at the Canadian banking system’s mutual fund advice model. A newly released study by the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) confirms what many already suspected: Canadian bank branches aren't in the business of giving impartial advice—they're selling financial products. Ben breaks down the implications of this study, which surveyed nearly 3,000 bank-affiliated mutual fund representatives, uncovering troubling statistics about sales pressure, lack of credentials,...
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The Rational Reminder Podcast
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The Rational Reminder Podcast
In this episode of the Rational Reminder Podcast, Ben Felix and Dan Bortolotti celebrate the show’s 7th anniversary with a conversation centered around timeless investing wisdom. Drawing from a vibrant thread in the Rational Reminder community, they unpack dozens of quotes that distill decades of financial insight into actionable mantras. What begins as a curated list of one-liners quickly evolves into a masterclass on the behavioral and practical realities of long-term investing. From “pay yourself first” to “diversification is the only free lunch,” Ben and Dan explore how...
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Episode 368: Jim Rowley & Andy Maack - Implementing Index Funds at Vanguard
The Rational Reminder Podcast
What if index funds weren’t as “passive” as you think? In this episode of the Rational Reminder, we are joined by Jim Rowley, Global Head of Investment Implementation Research, and Andy Mack, Head of US Equity Portfolio Management at Vanguard. These two experts offer a rare, behind-the-scenes look into what it really takes to run some of the world’s largest index funds—and it’s far from “set it and forget it.” From real-time trading decisions to managing $7 trillion globally, Jim and Andy walk us through how Vanguard implements index strategies with a precision that rivals any...
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Episode 367: AMA #8 + Insurance Needs Analysis with Louai Bibi
The Rational Reminder Podcast
What if early RRSP withdrawals aren’t always the tax-smart move they’re made out to be? In this special AMA edition of the Rational Reminder podcast, Ben and Cameron are joined by PWL Financial Planner Louai Bibi for a wide-ranging discussion on RRSP decumulation strategies, insurance planning, and the practical complexities that real clients face when theory meets reality. Ben walks through a listener’s case study and shares insights from colleague Melissa on why early RRSP withdrawals (a.k.a. “meltdown” strategies) are not always beneficial—especially when viewed through a...
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Episode 366 - Avoiding Investment Scams
The Rational Reminder Podcast
What happens when your favourite financial educator’s identity is hijacked by scammers? In this episode, Ben and Cameron pull back the curtain on a disturbing but increasingly common reality: sophisticated scammers using Ben’s name, voice, and online content to steal from unsuspecting investors. Ben breaks down exactly how these scams work—everything from fake WhatsApp investment groups and cloned emails to AI-generated voice notes and “pig butchering” scams that promise guaranteed returns. You’ll hear about pump-and-dump operations, shady PDFs full of financial nonsense, and how...
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Episode 365 – Rob Carrick's Eight Lessons Learned in 27 Years of Covering Personal Finance
The Rational Reminder Podcast
In this episode, we welcome back Rob Carrick—one of Canada’s most trusted personal finance journalists—for his third appearance on the Rational Reminder podcast. Rob recently retired after an incredible 27-year career at The Globe and Mail, where he shaped how millions of Canadians think about investing, advice, and their money habits. Rob joins Ben, Cameron, and Dan to reflect on the biggest lessons from his decades-long career, the state of Canadian financial advice today, and why young Canadians face headwinds unlike any previous generation. From the shift from mutual funds to ETFs...
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Episode 364 – Martijn Cremers: Is the Conventional Wisdom on Active Management Wrong?
The Rational Reminder Podcast
In this episode, we’re joined by Martijn Cremers, Dean of the Mendoza College of Business at the University of Notre Dame and co-author of the groundbreaking 2009 paper that introduced the concept of Active Share. Martijn brings fresh nuance to the long-standing debate over active versus passive management, challenging decades of conventional wisdom built on the foundational 1997 Carhart paper. With his comprehensive research, Martijn argues that dismissing active management may be overly simplistic—especially in less efficient markets like bonds, small-cap equities, or emerging markets....
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Episode 363 - The (Underappreciated) Risk of Individual Stocks
The Rational Reminder Podcast
What if holding just a few “winning” stocks is riskier than it seems? In this episode, Ben and Cameron explore the hidden dangers of concentrated portfolios and unpack the data that makes a strong case for diversification. Drawing from research by Hendrik Bessembinder, J.P. Morgan, and others, Ben lays out the harsh reality behind individual stock returns: the odds are stacked against long-term success. From skewed return distributions and catastrophic losses to behavioral traps like the endowment effect and familiarity bias, this conversation breaks down why most stock pickers lose—and...
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Episode 362 – AMA #7
The Rational Reminder Podcast
What if the hardest part of investing isn’t building a portfolio—but sticking to it? In this AMA edition of the Rational Reminder podcast, Ben Felix and Dan Bortolotti tackle listener questions ranging from sustainable retirement withdrawals to the dangers of structured products, with plenty of philosophical insights on risk, behavior, and financial planning. The episode opens with a deep dive into the 4% rule, exploring how time horizon, asset allocation, and global data can shift the definition of “safe.” They also explore the behavioral challenges of the “boring...
info_outlineWhat if index funds weren’t as “passive” as you think? In this episode of the Rational Reminder, we are joined by Jim Rowley, Global Head of Investment Implementation Research, and Andy Mack, Head of US Equity Portfolio Management at Vanguard. These two experts offer a rare, behind-the-scenes look into what it really takes to run some of the world’s largest index funds—and it’s far from “set it and forget it.” From real-time trading decisions to managing $7 trillion globally, Jim and Andy walk us through how Vanguard implements index strategies with a precision that rivals any active manager. They challenge the traditional labels of passive versus active and show how thoughtful implementation, securities lending, FX execution, and IPO participation can add real value for investors—even in low-cost index products.
Key Points From This Episode:
(0:04) Why Vanguard’s team was the ideal follow-up to Marco Sammon’s index research
(1:55) Why index funds aren’t as simple as they seem: rebalancing, risk, and strategy
(2:50) “Passive” is a misnomer: why index fund management involves active decisions
(4:42) What excites Jim and Andy about index fund implementation
(7:16) Risk-managed opportunities: how Vanguard adds value during secondary offerings
(8:02) Debunking the active vs. passive label—think in terms of strategy characteristics
(9:41) The subjective calls behind index construction and market definitions
(12:00) The goal of a market-cap weighted index fund and how Vanguard tracks it
(13:28) Why tracking error matters—and when it becomes a business risk
(15:48) Indexing’s advantage: predictable relative performance for portfolio construction
(16:15) The real complexity of daily index fund trading and execution strategy
(17:16) Vanguard’s unique approach: PMs and traders are the same person in equities
(18:52) The scale of VTI: how 24 global PMs manage trillions across time zones
(20:48) Why Vanguard’s culture treats every trade like it’s client money
(22:24) Andy’s story of building Vanguard’s FX desk and the hundreds of millions saved
(24:04) Quant vs. human judgment in index implementation—why both matter
(26:50) How fixed income index funds balance risk, liquidity, and security selection
(27:46) Tools traders use to minimize price impact: algos, limits, and timing strategies
(29:09) How index rebalancing impact has decreased thanks to market evolution
(31:36) The hidden mechanics behind index inclusion/exclusion and price effects
(33:40) Do index funds distort prices? Vanguard’s view on elasticity and ownership
(35:55) Stock dispersion and the case for continued price discovery
(38:09) Why using passive funds doesn’t mean being a passive investor
(43:15) Jim’s research: how “passive” funds are actively deployed by advisors
(50:43) How Vanguard handles IPOs, buybacks, and market composition shifts
(54:45) Active corporate action management: cash mergers, elections, and strategy
(55:27) Responding to Marco Sammon’s critiques on market timing and turnover
(58:55) What would change if rebalancing were less frequent?
(1:00:34) How securities lending and market advocacy add ongoing value
(1:04:42) Should Vanguard launch a flexible, non-indexed total market fund?
(1:06:26) Andy’s biggest concern: system risks and rebalance day challenges
(1:07:08) Jim’s biggest concern: index funds aren’t a free pass—investors still need discipline
(1:08:03) Defining success: alignment with investors and living a balanced life
Links From Today’s Episode:
Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p
Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/
Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder
Rational Reminder on YouTube — https://www.youtube.com/channel/
Rational Reminder Email — [email protected]
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/
Dan Bortolotti — https://pwlcapital.com/our-team/
Dan Bortolotti on LinkedIn — https://ca.linkedin.com/in/dan-bortolotti-8a482310
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).